Disclaimer: These are the views of Summit Financial Consulting and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
With a potential trade war with China looming and conflict in Syria escalating, volatility continues to grip the stock markets. Just like February, March provided a lot of ups and downs and ended lower. The Dow Jones Industrial average lost almost 4% during March (Source: finance.yahoo.com). Overall, our managed portfolios at TD Ameritrade performed extremely well comparatively, with 3 of our portfolios actually making money in March despite the headwind of poor stock market performance. This was primarily due to our allocation to sectors that performed well, including technology, energy, consumer discretionary stocks, and non-interest rate sensitive bonds (which have not been hurt by the rising interest rate environment). Now that active workers have seen a rise in their paychecks because of the tax legislation passed at the end of 2017, we believe that will be a positive contributor to the economy overall and could provide a less volatile market in the near term.
As we mentioned in our commentary a few weeks ago, the market was likely due for a correction and investors were able to take profits from 2017’s gains. Once again in March, our short-term market indicator turned red for a couple of days but changed back to green fairly quickly. Some of our indicators have turned yellow recently, meaning that caution is advised. In the near-term, assuming there is no large fallout from the geopolitical threats we’ve been seeing in the headlines recently, we believe there is a higher probability we’ll see all-time highs in the stock market before testing the lows again. We will continue to monitor the market’s movements daily, and do our best to buy low and sell high whenever possible. Even in a sideways market, we can potentially make money by buying low and selling high. April so far has been just as volatile. In the past two weeks, the S&P 500 has moved over 1% 8 different times (Source: pic.twitter.com/tyHGEMHe2c).
April, from a seasonality perspective, is typically a good time to be invested. In the past 10 years, the stock market has been positive 90% of the time in the month of April, and over the past 20 years it’s been positive 75% of the time (Source: https://kimblechartingsolutions.com/blog/). We believe this is because of last minute IRA contributions by tax filers. While we do not put much weight into this type of historical analysis because past performance does not predict future performance, it is a nice data point.
We will continue to take it one day at a time and let you know if there is a situation which calls for immediate attention. If you have any questions about tax season, your investment portfolio, our 401(k) service, or anything else in general, please give our office a call at (586) 226-2100.
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Thank you for your confidence and referrals!
Bob, Ken, and Jim
Summit Financial Consulting
Sales of all lottery tickets add up to a staggering $80 billion a year. For comparison, the entire U.S. film industry sells only about $11 billion in tickets. In 2009, 11 states made more from the lottery than they did from corporate income tax. – Huffington Post.com, March 1, 2018
South Korea, which has one of the longest workweeks in the world, is reducing the maximum number of hours someone can work in a week from 68 hours to 52 hours. Lawmakers hope the reduction will increase the country’s plummeting birth rate. – The Irish Times, March 1, 2018
Seventy-four percent of Americans said estate planning is confusing. Only a bit more than half of Americans have a will and just 17% have a trust. Only 10% of those without a will or trust have spoken with an attorney or other professional. – Counsels’ Estate Planning Awareness Survey
The printing of U.S. money has two active printing facilities- one in Washington, D.C. and the other in Fort Worth, Texas. Together they use 9.7 tons of ink per day. – Visual Capitalist, July 5, 2017
Home prices have soared by an average of 48% since 2011, while incomes increased by just 15% in the same period. – The Week, March 16, 2018
Uber and Lyft drivers in the U.S. make a median profit of $8.85 per hour before taxes. Factoring in costs such as car insurance, repairs, and fuel, researchers found that 8% of drivers actually lose money on the job, and 54% earn less than their state’s minimum wage. – The Guardian, March 5, 2018
Tesla, the single largest lithium consumer on Earth, will use up the entire world’s supply of battery-grade lithium when it hits annual production of 500,000 Model 3’s later in 2018. – Yahoo Finance, March 17, 2018
In South Carolina, a spelling error in a proposed “sagging pants” law could force men and boys to wear high-wasted “mom jeans.” The bill levies fines on anyone whose pants hang more than 3 inches below the crest of his ileum,” which is the stomach region, well above the hip bone. – SOTT.net, February 23, 2018
The cost of solar power and wind energy plummeted by more than 25% in 2017. – International Renewable Energy Agency, 2018
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services offered through Summit Financial Consulting LLC, a Registered Investment Advisor in the State of Michigan.